As we wrap up the majority of Swedish company earnings reports, it’s clear that most have met expectations, albeit barely. Despite a few disappointments, Stockholm’s broad index has risen by 3 percent.
Tough Times for Tech Giants
When it comes to global and tech funds, it’s the giants on the Nasdaq stock exchange that are making waves in July’s performance, even though we may have to wait for some reports. Meta, Apple, and Microsoft are set to report at the end of the month. Ahead of this, most are down in July, including Nvidia, which won’t release second-quarter numbers until later in August.
New Fund Focuses on Value Stocks
Despite July being less turbulent than June, we continue our cautious approach as we enter the last summer month. We are choosing the SEB Swedish Value Fund, which invests in Swedish value stocks. It is heavily weighted towards banks and investment companies and has only 16 holdings. Some of the largest positions include Volvo, Traton, and Astra Zeneca.
The fund is managed by Tommi Saukkoriipi and is a special fund, allowing for a concentrated portfolio with large individual holdings. The top four holdings together account for over half of the fund’s value. The fund has outperformed the index over ten, five, three, and one-year periods.
Strong Month for Real Estate and Small Caps
In our selected funds for July, we believed that upcoming interest rate cuts were not fully priced into the real estate sector, so we once again included a real estate fund. This proved to be the right decision as IKC Real Estate Fund has risen by 8 percent.
The relatively new addition to the list, Didner & Gerge US Small and Microcaps, also saw significant gains, up 10.8 percent for the month.
One reason for the strong July performance is that American small-cap stocks, for once, outperformed the tech giants. Our choice of tech fund, DNB Technology S, still holds up decently as it is underweight in several of them and instead has a significant overweight in Ericsson, whose stock price has recently taken off.
Swedbank Robur Global High Dividend and the two investment company funds, Spiltan Aktiefond Investmentbolag and Globalfond Investmentbolag, also performed well with gains around 4 to 6 percent.
Handelsbanken Healthcare Theme defied declines in the major holdings of Eli Lily and Novo Nordisk, rising by 4 percent.
Mixed funds, which investors are fleeing from according to the latest fund flow statistics, also had a good month, rising by around 2 percent.
Analysis:
In summary, the July investment landscape saw tech giants facing challenges, a new focus on Swedish value stocks, and strong performances in real estate and small-cap funds. Investors should consider diversifying their portfolios to take advantage of these trends and potentially boost their returns in the current market environment.